RIYADH, 2 April 2007 — Saudi Basic Industries Corp. (SABIC), the world’s largest chemical firm by market value, aims to more than double revenues to SR225 billion ($60 billion) by 2020, the chief executive told shareholders.
SABIC has said it plans to nearly double its production to 100 million tons by 2015 by building plants in China, India and Saudi Arabia, and making acquisitions in the United States and Europe.
The company’s development plan will make it one of world’s top three chemical producers by 2020, Chief Executive Mohamed Al-Mady told a meeting of shareholders on Saturday, according to two investors who were present.
The company aimed to have revenues of SR225 billion by then, a 160 percent increase on the 2006 figure, the shareholders, who asked not be identified, said.
Al-Mady could not be reached for comment. A senior SABIC executive confirmed the 2020 revenue target.
SABIC made a net profit of SR20.3 billion on turnover of SR86.3 billion in 2006. Fourth quarter profit was the best on record, rising 36 percent from the year-earlier period.
SABIC needed to sustain that growth, Chairman Prince Saudi ibn Abdullah ibn Thunayan told shareholders.
“The prince hinted SABIC would not sit idly and watch the mergers and acquisitions in the industry...and that it will do what is required to defend its market share,” one shareholder said.
SABIC agreed last year to buy the European bulk chemicals unit of US-based Huntsman Corp. A source familiar with the situation said last week the company was considering a bid for the plastics unit of General Electric Co.
GE said in January it was considering selling its plastics division as it focuses on higher-margin growth businesses. The plastics unit makes automotive parts, computer enclosures, compact disks, telecoms equipment and construction materials.
Shareholders of SABIC approved on Saturday a dividend of SR2.50 for the second half of 2006, the company’s chief financial officer said.
The payment brings the total 2006 dividend to SR4 per share, down 13 percent from 2005, for the largest listed Arab company. “The annual general meeting approved all the resolutions proposed by the board, including that of the dividend distribution,” Mutlaq Al-Morished told Reuters.